UAE investors eye September as Fed rate-hike expectations hold firm

Dubai: Safar News
The US Federal Reserve held its benchmark rate steady last Wednesday at 3.5% to 3.75%, the fifth consecutive hold. The vote wasn’t unanimous, though. Three regional Fed presidents dissented in favour of a quarter-point hike, the most dissents on record since 2016.
The split has taken on more significance in the days since. Oil prices fell more than 6 per cent the same week, a move that would normally ease inflation pressure and make the case for a hold easier, not harder. Instead, a third of the committee wanted to move the other way, and the Fed’s own language leaned hawkish.
Kate Leaman, Chief Market Analyst at AvaTrade, said the decision itself may end up mattering less than what it does to expectations for the Fed’s next meeting.
“Wednesday’s decision may matter less than what happens to September rate expectations afterwards. A hold accompanied by hawkish language could keep the dollar firm, limit any near-term rebound in gold and offset some of the impact of weaker oil prices. A softer tone, though, could begin to unwind that rate-hike pricing, giving gold and regional equities more room to advance,” she said.
For UAE markets specifically, Leaman said the more relevant driver isn’t the rate decision on its own.
“UAE equities tend to respond less to the Fed decision itself than to what it signals for global risk appetite and oil-related flows. If the Fed remains hawkish despite falling oil prices, that combination could become the more important story for regional markets this week, not the rate decision in isolation,” she said.
Fadi Abou Ras, CEO of AvaTrade Middle East, said the split vote was a reminder not to read too much into any single decision.
“Our job in weeks like this isn’t to predict the Fed’s next move. It’s to give clients transparent pricing and clear, grounded market data so they can make informed decisions, rather than reacting to rumours or headlines,” he said.
The next FOMC meeting is set for September 15-16. With three officials already on record wanting to hike, the bar for a hold at that meeting may be higher than it was going into last week.
AvaTrade is a multi-asset broker with two decades of trading experience. In the UAE, AvaTrade Middle East operates under regulation from the Abu Dhabi Global Market, alongside licences across ten jurisdictions globally.